Indian stock markets recover morning losses to close high
11:00, 29 November 2021
Indian stock markets ended high, rebounding from opening losses, even as concerns remained over the spread of the new coronavirus variant.
Oil and gas company stocks were hit the most but their losses were offset by the gains in financial services stocks.
Shares of Kotak Mahindra Bank gained the most among the index constituents after the Reserve Bank of India (RBI) said that Life Insurance Corporation of India, the nation’s largest life-insurer, can raise stake in the private sector lender to as much as 9.99%.
Shares of Kotak Mahindra Bank finished 2.8% higher at INR2,019.6 on the National Stock Exchange.
Performance of benchmarks
The National Stock Exchange’s 50-share Nifty50 index rose 0.16% ending at 17,053.9 points, while the S&P BSE 30-share Sensex advanced 0.27% to close at 57,260.5 points. The Indian rupee was trading 0.54% lower to the US dollar, to INR75.3 as of 16:00 hours local time (UTC+5:30).
“Nifty gave a bounce back from its mid-term support level of 16800. It closed at 17045, up by 18 points. Now 16800 and 17600 are the key levels for Nifty. A break in any direction will decide the short term trend for Nifty. Traders can use buy-on-dips strategy with a strict stoploss of 16800,” said Gaurav Udani, chief executive officer at ThincRedBlu Securities in Mumbai.
The Nifty IT index, a basket of 10 software company stocks including the nation’s largest TCS, rose 0.76% today. The financial services index ended marginally higher to help offset losses from the Nifty Media index, which fell 2.24% and the Nifty PSU bank index which was down 2.04%.
“Index closed a day at 17054 with minimal gains and formed a Doji candle pattern on the daily chart, which represents indecision in the markets. Immediate support for Nifty is coming near 16930-16800 zone and on the higher side index has stiff hurdle around 17150-17270 zone also one can look for trimming their longs around mentioned resistance zone, overall strength will come only above 17350 zone and until trading below 17350 levels, we may see sell-on-rise structure intact,” said Rohit Singre, senior technical analyst at LKP Securities.
Farm laws repealed, but Covid fears linger
The markets were also boosted after both houses of the Indian parliament approved a bill to repeal the three contentious farm laws against which farmers have been protesting for more than a year.
The bill was passed within minutes of introduction by Agriculture Minister Narendra Singh Tomar on the first day of the winter session of the law-making bodies.
But the undertone in the markets remained edgy after the World Health Organisation warned last week of the emergence of a Covid-19 mutation – termed Omicron – out of South Africa and Botswana as an official variant of concern.
“Domestic indices trimmed its early losses to trade modestly higher backed by IT and healthcare stocks, amid lingering worries over the emergence of the new covid variant. Global markets traded mixed as investors were torn between buying on dips and the uncertainties over the impact of Omicron on economic recovery. However, the global market has factored well the near-term uncertainty limiting further downside,” said Vinod Nair, head of research at Geojit Financial Services.
Now, Reliance increases mobile prices
Indian mobile phone operator Reliance Jio Infocomm said it would increase prepaid tariffs by up to 20%, along the lines of similar hikes by rivals Bharti Airtel and Vodafone Idea.
Reliance Jio, part of India’s second-largest conglomerate Reliance Industries, is launching a series of new plans from 1 December that would reflect the price hike, the company said in a press statement.
“These plans will provide the best value in the industry. Upholding the RJio promise of providing the best quality service at the lowest price globally, Jio customers will continue to be the biggest beneficiaries,” the release added.
Shares of Reliance ended 1% higher at INR2,437.7 on the National Stock Exchange.
Outlook for the week
Markets await the outcome of the cryptocurrency bill in the Indian parliament which would be tabled at the Parliament in its winter session. The bill intends to prohibit private currencies but approves an official digital currency to be issued by the RBI.
This week, the government would release the official gross domestic product or GDP data for the July-September quarter, which is also expected to provide broad directions to the market.
“We expect choppiness to remain high citing the prevailing uncertainty around the new Covid variant. Besides, on the domestic front, macroeconomic data like GDP numbers, core sector data and auto sales figures will further add to the volatility. We reiterate our cautious stance and suggest preferring hedged positions,” said Ajit Mishra, vice president for research at Religare Broking.